D&D worlds, or at least the big published ones I know of, tend to operate off the assumption that the ladder of power goes up more or less forever, and there is always some bigger badder dude with an opposing alignment to smack down anyone who upsets the applecart. On balance, however, the good guys are the baddest dudes at any tier (thus golds/silvers being canonically superior to reds). "Evil" is like a plague in that it is usually absent or suppressed, but occasionally breaks out in some afflicted region, does a lot of damage, and in the end either burns itself out or gets extinguished by the Forces of Good who are personally invested in preserving the fundamentally decent status quo of the setting. This is necessary because, given their power, if there was any kind of even match between "sides" the world would presumably be uninhabitable for 1st level human farmers. Faerun is in the main a nice place to live as long as you avoid the occasional dystopian hellholes scattered about and don't happen to live during the "Year of Giants Just Wrecking Shit Everywhere" or similar periodic catastrophes.

I can't really take D&D dragons seriously anymore. It's just too difficult to make D&D color-coded flying energy lizards fit into some kind of sensible ecology or world order. When I tried to have "dragons" in a recent more-or-less standard fantasy world I was working on, I ended up changing so many bits that I was left with a totally unrecognizable concept. These days I prefer my dragons to be Beowulf-style avatars of greed, who don't "rule the world" because they don't have the same kinds of motivations you or I do.

* You meet the New Age Retro Hippie* The New Age Retro Hippie lost his temper!* The New Age Retro Hippie's offense went up by 1!* Ness attacks!SMAAAASH!!* 87 HP of damage to the New Age Retro Hippie!* The New Age Retro Hippie turned back to normal!YOU WON!* Ness gained 160 xp.